Ere Babylon was dust,Economics has a double. Whenever an economist encounters that shade he lets out a terrified shriek. For Marx, the spectre haunting Europe was called communism. For Dilke, it was disposable time. It was Nassau Senior's "Last Hour". But for militantly anti-union employers at the turn of the 20th century -- and economics textbooks thereafter -- it was a humble lump-of-labor fallacy.
The Magus Zoroaster, my dear child,
Met his own image walking in the garden.
That apparition, sole of men, he saw.
For know there are two worlds of life and death:
One that which thou beholdest; but the other
Is underneath the grave, where do inhabit
The shadows of all forms that think and live
Till death unite them and they part no more....
Make no mistake. When economists do it, it is arcane and learned ceteris paribus hokus pokus. But it is a fallacy and an aberration when the uncouth and uninitiated try their hand and apply it to the Great Shibboleth.
Classical political economy did not survive Marx's critique. To get around that embarrassment, economists erected the hydra-headed neo-classical scaffolding of a marginalist analysis whose elusive variations and elaborations make it harder to pin down.
In their heart of hearts, though, contemporary economists cling to a cherished inheritance from their classical forebears: the "wage-fund" of a fixed amount. But in this case, the error of this assumption is projected onto a hazily unspecified Other -- politicians, unionists, Luddites, Utopians or cranks. Whoever. This Other is the tremulous economists' doppelgänger
Economizing is labor saving. Economy means doing more with less. People specialize and trade so that they can have more with less effort. The purpose of technology is to reduce the amount of effort required to make something -- that is, to reduce the amount of wasted effort.
The purpose even of many consumer goods is to bring greater ease into our lives. A washing machine spares the housewife hours of scrubbing and wringing. A car relieves the shopper from the tedium of walking to the grocery store and the burden of carrying groceries back home.
The end of work, that is to say, is leisure. Even when the labor-saving capabilities of specialization, trading and technology are turned toward the production and consumption of more goods, those goods themselves are overwhelmingly aimed at expanding ease and leisure. Adam Smith observed this peculiar fact in his Theory of Moral Sentiments. And he wasn't the only one.
If the end of work is leisure, the end of growth is more work. Houston, we have a paradox. To economize is to save labor but to "grow the economy" is to waste it. Every economic action leads to a fork in the road. To save or to spend? To have more or to work less?
This bifurcation, this paradox, makes any conceivable economic calculation indeterminate. All the great economic thinkers -- Smith, Marx, Mill, Marshall, Veblen, Keynes -- acknowledged this paradox. Economics, then, is in essence the elaboration of a riddle -- an "unsolved riddle" in Leacock's phrase -- not the mechanical grinding out of predictions.
But statesmen, generals and captains of industry don't want to be bothered with silly riddles. They want predictions -- but, of course, only certain kinds of predictions, "mirror, mirror on the wall." And it is the statesmen, generals and captains of industry who write the checks -- even though the toiling masses are the ones who will be compelled to honor those checks with their blood, sweat and tears.
Economists who cash those checks with their mystically pedantic predictions are impostors and charlatans. One of the time-honored ruses of charlatans and crooks is to loudly denounce others as quacks and cranks. It's a good distraction and it establishes the bona fides of the confidence man as someone who can be trusted to proclaim the difference between truth and falsehood. And if the accused replies with a counter-claim? Well, who spoke first? It is to entrap the mark in a hall of mirrors.
Is there a way out? Listen. Touch. Smell. Explore. Remember.
Ten years ago, Tom Walker comprehensively refuted the lump-of-labor fallacy claim in a chapter, "The 'lump of labor' case against work-sharing: Populist fallacy or marginalist throwback," included in the anthology Working Time: International trends, theory and policy perspectives.
Four years after that refutation was published, the bogus fallacy claims again blossomed -- presumably in response to the French 35-hour workweek experiment and to the jobless recovery after the 2001 recession. The Sandwichman began a series of postings to MaxSpeak re-iterating the debunking of the fallacy claim. Those posts evolved into a second article, "Why Economists Dislike a Lump of Labor," published in the September 2007 Review of Social Economy.
The nonsensical nature of the fallacy claim is extreme. It is akin to the innumerable sayings attributed to Mark Twain that he never said or the many beliefs attributed to Marx that, in actuality, he quoted only to criticize. And like those misquotations, the fallacy claim circulates on, oblivious to the truth of its origin, its logical coherence or its factual ground.
The real shame, though, is not so much in the thoughtless circulation of this baseless claim as in the almost unanimous deference paid to the blustering pronouncements by the economics profession. It is a shame because leisure, unemployment, waste, environmental sustainability, social justice and war are important issues and to trivialize and marginalize a potentially effective policy approach to those issues is, to say the least, "inappropriate", if not technically criminal negligence.
Some would say that those who knowingly, or through flagrant and obstinate refusal to perform their duty of due diligence, bring on a war, plague or famine are guilty of mass murder. They are little and not-so-little Eichmanns. But the Sandwichman is wary of such name-calling. The Sandwichman would rather offer incentives than invectives.
On May 1, 2008, the Sandwichman offered a $10,000 prize to anyone who could successfully refute Tom Walker's debunking of the lump-of-labor fallacy and get it published in a leading economics journal. The judge for whether the rebuttal was successful or not would thus have been not the Sandwichman himself but a pillar of the economics profession.
Academics warned the Sandwichman that such a bet was foolhardy because respected journals will publish "all kinds of crap" as long as it conforms to the prevailing ideology. Nevertheless, the deadline for entering the prize competition -- December 31, 2009 -- came and went and the Sandwichman didn't receive a single entry or even an inquiry. Zilch, zip, nada. Not only will the lump-of-labor mongers not put their money where their mouth is, they won't even put their mouths where the money is!
Last year (2009) alone, "Charlemagne" at The Economist, Peter Coy at Business Week, Harvard Economics Professor Edward Glaeser, Ed Crooks at the Financial Times and Northwestern Economics Professor Robert J. Gordon each invoked the lump-of-labor fallacy claim in complete ignorance of what they were talking about. The Sandwichman has been accused of being repetitive. The Sandwichman doesn't like to be repetitive. But when people who get paid to know what they are talking about keep repeating nonsense and lies, the Sandwichman suspects that maybe folks haven't heard yet that the jig is up on the lump-of-labor scam.
Ten thousand dollars says Robert J. Gordon is a buffoon, Edward Glaeser is a impostor, Peter Coy is a con-man, Ed Crooks is a crook and Charlemagne is a charlatan. The Sandwichman is not calling these gentlemen those names, though. He is offering them a wager. Although the original prize offer has expired, terms for an extension remain negotiable.
Listen. Touch. Smell. Explore. Remember. Above all, remember.